Rumor has it that Sprint is in talks with Clearwire, to acquire the struggling WiMAX provider. Currently Sprint has a 54% stake in Clearwire and they might be looking to buy out the remaining shares. Bloomberg reported that Sprint may be partnering with several cable providers, including Comcast and Time Warner, to come up with the money needed for an acquisition. This comes as surprising news, as it was believed that Sprint would drop Clearwire after entering a 15 year agreement with Lightsquared. Some analysts believe that Sprint is hedging their bets, in case Lightsquared’s network gets put on hold by the FCC. If Lightsquared tanks, Sprint would have Clearwire’s network to fall back on.

Recently Clearwire announced that it plans to supplement their WiMAX network with an LTE network. To expand their current WiMAX network and build up an LTE network, they would require more than $600 million. According to Craig Moffett, an analyst at Sanford C. Bernstein & Co, it is unclear where Sprint would get the money to build an LTE network from the ground up. If Sprint can successfully build up Clearwire’s network, it would give them an even footing with Verizon and AT&T.

If Comcast backs Sprint financially, it would give them access to a wireless network. This would enable them to offer quadruple play: cable television, home Internet, telephone and mobile Internet. Currently both Verizon and AT&T offer quadruple play packages, having another provider offering service can only be good for the consumer.

Clearwire’s 4G WiMAX technology is spreading faster than a cold in a day care center. Within the recent months coverage has increased by over fifty percent. Already laying claim to 74 markets in the United States, Clearwire is championing the 4G technology realm with gusto. These 74 markets span across the entire country in 25 different states.

A central point in this current 4G monopoly is the division of power of Clearwire Corporation. Sprint is the majority shareholder by a mere 56+%, with Comcast, Intel and Time Warner holding modest, yet still significant shares too. Evidently, Clearwire has been sharing its network with its partners, as we have seen Sprint unroll a 4G nationwide network in the last few months. Even more interesting, however, is the release of 4G technology from Clearwire’s other partners.

Both Comcast and Time Warner have announced plans to launch their “respective 4G networks” alongside upcoming Clearwire launches. It is a tad bit perplexing from this point on. It has already been established that Sprint will, of course, be sharing Clearwire’s glory with each new launch, adding each budding network to its own collection. What seems to be irregular, however, is that Clearwire is going to be launching its 4G network in some of its biggest cities during the upcoming months, concurrent with its partners. Time Warner has already linked onto the highly anticipated NYC launch, and Comcast to San Francisco’s.

Is this counterproductive? At the times of these deployments Clearwire will still be the sole 4G technology provider in these given cities. It’s possible that Clearwire wants to give consumers the benefit of making a choice in their decisions. It may cause the money’s flow to deviate from the anticipated Clearwire 4G domination. These minority “partners” may make higher dividends in these select cities. But, on the other hand, dissatisfied customers may find comfort in the shelter of companies not directly under the Clearwire umbrella. When Verizon and MetroPCS launch into larger markets, they have an opening to steal many of the condensed consumers from Clearwire’s grip. If, however, Clearwire allows its partners an anchor in the fresh 4G market, all companies stand a better chance of keeping their customers.

Last week we wrote the first of a series of articles about broadband deployment, and offered suggestions to help foster and develop rural broadband through stimulus and Universal Service funds, municipal broadband projects and competitive bidding. In this article, we review the current status of broadband deployment in light of the recent Comcast Decision and the FCC’s proposed National Broadband Plan.
In the Telecommunications Act of 1996, Congress codified the FCC’s distinction between “telecommunications services” used to transmit information and “information services” that run over the network.  The FCC later eliminated the regulatory asymmetry between cable companies and other broadband Internet service providers by extending the information service classification to broadband Internet services offered over DSL and other wireline facilities, power lines, and wireless.  Today broadband Internet service may be offered as an information service  subject to consumer protection, network reliability, and national security laws, rules and regulations, but largely exempt from Title II telecommunications service regulation.
Expressing its resolve to further broadband deployment, Congress recently passed
1) the 2008 Farm Bill directing the FCC to submit to Congress “a comprehensive rural broadband strategy,
2) the Broadband Data Improvement Act to improve data collection and “promote the deployment of affordable broadband services to all parts of the Nation”, and
3) the Recovery Act, which appropriated up to $7.2 billion for broadband services deployment, and required the FCC to develop the National Broadband Plan.

Earlier this year the U.S. Court of Appeals for the District of Columbia vacated the FCC’s 2008 Order barring Comcast from interfering with its customers’ use of peer-to-peer networking applications. Comcast Corporation v. Federal Communications Commission, et. al., No. 08-1291 (D.C. Cir. April 6, 2010). The Court vacated the FCC’s Order because the FCC failed to tie its assertion of ancillary authority over Comcast’s Internet service to any “statutorily mandated responsibility . . .” Id. at 36. With this blow to the FCC’s authority to force Internet service providers to keep their networks open to all forms of content, the Comcast Decision raises serious questions about the FCC’s ability to regulate broadband.

Faced with the reality that approximately 100 million Americans do not have broadband at home, the FCC’s July 20th announcement that between 14 and 24 million Americans still lack access to broadband overall, and Congress’s mandate that the FCC ensure that every American has “access to broadband capability,” the FCC rolled out its proposed National Broadband Plan earlier this year. The Plan has six goals “for 2020 to serve as a compass over the next decade”, including broadband access for at least 100 million homes at 100Mbps, and affordable access to at least 1 gigabit per second broadband service for every American community.   Some critics argue that the FCC’s goals are too modest, that they do not adequately promote rural broadband and that they will continue to place the United States behind other nations such as Finland and South Korea.

Seeking more input on the Plan, on June 17th, the FCC issued a Notice seeking comments on ways to regulate broadband, including 1) rely on its ancillary jurisdiction, but with a clear explanation of statutory authority, 2) reclassify broadband as a telecommunications service, and 3) reclassify broadband as a telecommunications service, subject to forbearance from certain statutory requirements.  More specifically, Chairman Genachowski’s so called “Third Way” would treat wired broadband Internet connectivity as a telecommunications service.

Although the FCC Notice states that the FCC is not seeking to regulate anything other than retail broadband Internet access, the stakes are high.  Will broadband soon be subject to unbundling, resale, universal service and other obligations?  Where does Internet connectivity begin and end, and how will regulators deal with the endless possibilities for arbitrage and inaccurate reporting?  Will the Internet be subject to Title II telecommunications service regulations designed for legacy telephone systems, possibly transporting high tech broadband service back in regulatory time?   Will sweeping broadband regulations stifle investment and deployment, increase costs, and make broadband even more inaccessible, or are they necessary to foster a competitive market?  These are just some of the many questions that must be addressed as regulators grapple with the best way to promote broadband deployment.

A wide spectrum of comments were filed with the FCC on the July 15, 2010 deadline for initial comments, predictably ranging from requests from some carriers and service providers not to assert authority over Internet services, to subscriber pleas for the FCC to reclassify broadband as a telecommunications service. Still others expressed concerns over privacy, discrimination against ISPs, and lack of rural broadband deployment progress.

As Marty McFly said in Back to the Future, “If you put your mind to it, you can accomplish anything.” Now is the time to put our minds to it and get broadband deployment right. Continuing Congress’s resolve for rapid broadband access, now may be the time for new legislation that clears the path for broadband deployment.

Replies are due Aug. 12, 2010.  Let us know what you think.

© 2010 Technology Law Group. Craig Dingwall is an attorney with the Technology Law Group, a Washington, D.C.-based law firm specializing in telecommunications transactional matters, complex litigation and intellectual property issues. Craig can be reached at cdingwall@tlgdc.com, at 202-895-1707, or at our website: www.tlgdc.com. The views in this article are those of the author, and do not necessary represent those of the Technology Law Group.

Comcast Corporation recently began offering its High-Speed 2go service in 10 additional markets. Baltimore, Richmond and Washington D.C. all now can experience 4G speeds from Comcast. It will also offer the services in the Pennsylvania markets of Harrisburg, York, Scranton, Reading, Lancaster, State College and Lebanon.

The High-Speed to go offers both 3G and 4G coverage in the available markets. The service will be bundled with their Internet, phone and television services. It’s mobile broadband internet wherever customers need it.

“The world-class services Comcast is known for in the home are beginning to be extended to anywhere consumers work, live and play with the launch of Comcast’s High-Speed 2go mobile solution,”  Rick Lang, senior vice president of marketing and sales for Comcast’s Eastern Division, said, “Comcast continues to drive innovation in the industry and this launch gives customers the best of both worlds — the fastest fast at home and on the go as a natural extension of our super fast wired high-speed Internet.”

The High-Speed 2go Nationwide Preferred wireless data card operates on both the 3G/4G networks and splits between the two networks. Comcast is now offering a 4G only data cards in Philadelphia as High-Speed 2go Metro service. It’s the fastest mobile Internet connection available when in market.

Comcast uses Sprint’s 3G network when not covered by the 4G connection. Comcast was also an investor in Clearwire.  Google, Brighthouse Networks and Sprint also invested money into the 4G network builder. Clearwire is the company that sets up the 4G networks using WiMAX technology. If CLEAR isn’t in the market, then Comcast can’t offer the 4G connection. The company offers different devices, including CLEAR spots, mobile routers. They’re the only 4G operator that offers home modems along with a series of USB modems. Sprint owns a majority share in Clearwire, but

Clearwire raised around $290.8 million in a stock sale. The company offered 93,903,300 shares of Class A common stock, valued at $7.33 per share. The end results show that 39.7 million shares of Class A common stock were purchased for the final price. There was potential to raise $361 with all the stock rights offered.

Clearwire has a great track record of raising money through stock offering and partnerships with wholesalers and tech companies. Google, Brighthouse, Comcast, Time Warner and Sprint all invested hundreds of millions of dollars last year. That was to help with the build out of more networks in 2010, including adding markets in Houston, Baltimore and other launches in 2010.

The company has said it will spend between $2.8 and $3.2 billion building out their network this year. CLEAR service is offered in 24 markets, with plans to launch markets in New York, San Francisco and Los Angeles by the end of 2010. This funding should go a long way to finish the network build out this year. It might also help Clearwire switch 4G technologies, from WiMAX to LTE.

Clearwire lost money during the first quarter of 2010, but it added more subscribers during that period than all of 2009. Thing are looking up for the 4G carrier, getting an advantage of being first to market with 4G wireless broadband. They’ll soon have competition in the market. Verizon Wireless plans on launching LTE in 25-30 markets by the end of 2010.

Summer is most people’s favorite season. The weather  is fantastic and people want to do more. Companies take the time to release new products and services. This extends to the WiMAX space too. Clearwire will have 50 U.S. markets by the end this summer.

Comcast will offer 3G Internet services in Boston soon, with WiMAX coming early this summer. In their earnings report for first quarter 2010, Comcast hinted that WiMAX will come to Boston during the second quarter of 2010.

This leaves June as the expected date when Clearwire will launch WiMAX in Boston. It’s an exciting way to start the summer. It is also an exciting time because it’s believed that Sprint will release the HTC EVO 4G phone during the early summer months. This comes along with CLEAR launching services in central Pennsylvania in the beginning of May.

The WiMAX operator recently announced the 18 markets it will add to the current 32 by the end of summer 2010.  St. Louis, Orlando, Tampa, Syracuse and Rochester and NY are among the markets that will get WiMAX services. Clearwire partnered with Comcast and Time Warner Cable to offer the service under their brands.

Comcast and Time Warner Cable offer pretty standard devices, simple USB devices for business men that spend a lot of time on laptops. They can now hold video conferencing in parks where the 4G coverage is available. The service will be bundled with the home internet connection, providing a cheaper rate for home and mobile internet connection. WiMAX provides the same kind of speeds that are seen with wired internet connections.

It shows renewed investment in WiMAX from the cable companies. It’s publicized when Time Warner Cable, Comcast, Google, Sprint and Brighthouse all invest in Clearwire, but to actually see the service being offered is a brighter sign. It shows commitment and not just an influx of cash.

Bundling the packages are smart because it allows users to get the technology and eventually switch to a better WiMAX connection from CLEAR or Sprint. CLEAR and Sprint offer similar WiMAX packages, but Sprint has the advertising dollars to promote 4G a little more than CLEAR. Sprint only offers two 4G devices now, the Overdrive Mobile Hot Spot that handles up to five WiFi devices at one time, and a USB modem. Soon they will offer the sleekest and most sought after device, the HTC EVO 4G, the first WiMAX-enabled phone available in the U.S. It doubles as a hot spot and works on 3G connection when not in a 4G market.

CLEAR promotes wisely, holding launch events and other promotions within market. They don’t have to spend a lot on national television advertisements or national print ads. It’s cheaper to purchase space in local magazines and the local broadcast stations. CLEAR offers many similar devices to Sprint, including a 4G+USB modem that falls back to 3G when not in a WiMAX network. CLEAR also offers the only home WiMAX modem. They offer packages for both home and mobile use, granted you must purchase both devices.

If you’re in one of the new WiMAX markets and plan on making the change, there’s a lot of quality options. CLEAR offers the most comprehensive variety of devices, from the CLEAR Spot mobile hot spot, to USB Modems and a home modem for users looking to have a complete WiMAX internet package. Sprint offers the sexiest device, the HTC EVO 4G but it’s going to be on the expensive side. CLEAR plans on releasing a WiMAX phone by the end of the year, but they’re probably going through a few tweaks before making an announcement. It’s going to be an exciting summer for WiMAX.

Clearwire, along with wholesale partners Comcast, Time Warner Cable and Sprint announced their summer 2010 launch lineup on May 5. It’s an impressive list of markets, including Tampa, Orlando, St. Louis, Nashville and Salt Lake City. In all, Clearwire will add 18 new markets by the end of summer 2010. This adds to the already positive news that Clearwire launched 4G in central Pennsylvania on May 1.

Each operator will offer their own brand of WiMAX. Comcast will offer the services in Merced, Modesto, Stockton and Visalia, CA, Wilmington, DE, Grand Rapids, MI, Eugene, OR, Yakima and Tri-Cities, WA. Time Warner Cable will offer WiMAX services in Kansas City, KA, Rochester and Syracuse, NY.

Comcast will use the Comcast High Speed 2go brand when marketing WiMAX. It will be bundled with their home internet connection in the markets. Time Warner will market the product under Road Runner Mobile. Road Runner Mobile offers a 3G connection when not covered in the 4G market. Time Warner offers two different USB modems for its 3G/4G unlimited service and 4G unlimited service. Comcast offers similar services, using mostly USB modems for a 4G connection.

Clearwire and Sprint will offer their 4G services in all markets. CLEAR WiMAX offers faster download speeds, more mobility and great devices. Get the CLEAR Spot mobile hot spot that allows for up to eight WiFi enabled devices. Get the fastest connection for iPhones, iPads and other devices. Sprint offers the Overdrive, a mobile hot spot for up to five WiFi enabled devices. Sprint’s brand, 4G will offer many different packages, depending on which device users choose. Also being released this summer is the Sprint HTC EVO 4G, the first WiMAX-enabled phone available in the U.S.

It’s super fast internet connection is presented in four different ways in different markets. Any people in these markets should be excited to experience the fast speeds offered by WiMAX. Clearwire is making the push to add a significant population to its subscriber base during the summer 2010. It was expected that the company would  take drastic measures this summer to grow its user base by expanding to more markets.

Clearwire and Sprint plan on launching WiMAX in many other markets in 2010. New York City, Los Angeles, Boston, Washington D.C., Denver Minneapolis, San Francisco, Miami, Cincinnati, Cleveland and Pittsburgh will join the 18 markets above by the end of 2010. It’s all part of Clearwire’s plan to cover 120 million people by the end of 2010.

Full List of Summer 2010 Markets

• Tampa
• Orlando
• St. Louis
• Nashville
• Salt Lake City
• Jacksonville
• Daytona, FL
• Kansas City, KS
• Merced, CA
• Modesto, CA
• Stockton, CA
• Visalia, CA
• Wilmington, DE
• Grand Rapids, MI
• Eugene, OR
• Yakima, WA
• Tri-Cities, WA.
• Rochester, NY
• Syracuse, NY

Photo Courtesy of hawaii via Flickr

After the first round of broadband stimulus funding led to disappointment and discontent, it appears that the National Telecommunications Information Administration (NTIA) is eager to properly and efficiently allocate money in the second round of funding.

The final window for applications opened last Tuesday, February 15 and will go until March 15. NTIA administrator Lawrence Strickling has said that the application process will be simplified and less laborious than round one and the NTIA will be giving special priority to applicants that are anchor tenants including hospitals, community colleges, and government agencies.

Xanadoo Networks CEO Mark Pagon commented on the simplified process and its effect, “WiMax projects should do essentially better in the second round. Lack of clarification in the rules for the first round created confusion and lead to many applications being denied, but improvements in the process should give applicants with sound proposals the opportunity to reapply in the second round.”

Up until recently, things have not gone smoothly. Only a very small percentage of the $7.2 billion for broadband in the stimulus package have been allocated thus far and incumbent carriers have been standing in the way of projects. Most of the funds from round one ended up going to vendors. A lack of funding assigned to specific projects also led to overwhelming demand for money from the Agriculture Department’s Rural Utilities Service that simply could not be met.

This being said, the question is, will the second round of funding help the targeted groups – those with the least amount of access and who need it most – the way that the NTIA and RUS have claimed that it will? NTIA administrators and government workers are looking forward with optimism and believe that they can improve the system and more fairly allocate funds based on need through a fair application review process.

In reviewing applications for round two, Strickler said that, “I am very much looking for the management experience of the team that’s putting it together, the budget they’ve put together, and the reasonableness of the assumptions they are making. We want to see that this is a project that will stand on its own once the federal money is gone.”

The grants are designed to address low-density areas where it is too expensive to lay broadband lines or build transmission towers to generate worthwhile return. A majority of the NTIA’s funds will go to middle-mile projects which serve as the connectivity foundation. The RUS will then fund last-mile projects, extending their own equipment to buildings and selling broadband subscriptions to the occupants of the building.

Roughly $2.3 billion of the $2.6 billion left for the NTIA will go to infrastructure projects. WiMax operators should instead look to the RUS for the best opportunity. The RUS has roughly $2.3 billion left to fund last-mile projects in the second round compared to $300 million in the first round.

Will round two make a difference? A streamlined application process, increased funding, and greater efforts made toward covering targeted areas could be the key ingredients to success.

Clearwire is currently changing its business model as it becomes more of a wholesaler. The company plans to focus on leasing space on its WiMax network to other telecommunications companies like Time Warner Cable, Sprint Nextel and Comcast. WiMax networks currently cover 30 million people in the U.S., though Clearwire has less that one million subscribers. Clear is the service end of Clearwire’s roll out plan.

Some operators have previously released specifications for the purchase of their CPE products to the market, however these products will not always be purchased through Clearwire‘s supply chain.

Clearwire currently offers service in 27 markets throughout the U.S., including Las Vegas, Chicago and Philadelphia. There have been rumors that Clearwire may team with Wal Mart to roll out complete coverage across the U.S. and they are also in the process of making a big push to get into two more vital markets, New York and San Francisco.

With endless availability of information and a heightened degree of uncertainty in terms of where the economy is headed, looking forward at the next twelve months and attempting to predict in what direction WiMax is going is a daunting task. This being said, it is also an interesting and exciting opportunity to examine the positive ways in which WiMax will benefit the wireless world in 2010 and the ways in which the wireless world will respond to WiMax expansion.

Globally, a future increase in WiMax deployment can be expected. According to Infonetics Research, the number of global WiMax subscribers is expected to grow from 4 million at present to 130 million subscribers by 2013. Nearly every developing country currently has a WiMax network and this demand for wireless Internet access will only exponentially increase in the future. WiMax’s appeal lies in its ability to offer computer or terminals with enhanced mobility and access to high speed Internet without the need to connect the terminal to any cable network or Wi-Fi hotspot. There are already well over 475 WiMax networks deployed to date in 140 countries worldwide and though exact numbers are debatable, there is no doubt that substantial growth and network expansion is taking off at a very fast pace.

In addition to an increase in the number of networks traced by WiMax, many of the already established WiMax networks continue to rapidly expand. Two prime examples of such expansion include Yota and P1. Yota reached 250,000 active commercial users on its Russian network and passed the breakeven point with more than 2,300 subscribers added per day to its WiMax network. In April 2009, 65 product models from six vendors with WiMax embedded chipsets were introduced to the Russian market and in 2010, Yota expects to add a new GSM + Mobile WiMax phone supporting VoIP over WiMax. Malaysia’s Packet One Networks (P1) is chugging along as well, recently reaching 130,000 subscribers and looking ahead to the New Year with hopes of increased growth.

WiMax deployment and expansion can be expected in Africa as well. Kigali, Rwanda’s capital city, is set to become Africa’s first hotspot. The Wireless service will be commercially available in three months and will be based on WiBro, Korea’s own version of WiMax. Korean Fixed-Mobile carrier Korea Telecom is also working on a $40 million project called the Kigali Metropolitan Network (KMN), which began in 2008 and aims to provide a network for Internet access in Rwanda. This announcement demonstrated both WiMax’s increasing popularity globally along with major momentum taking off in developing countries who are currently struggling to gain wireless Internet capabilities. Though poor infrastructure, insufficient resources, lack of knowledge and financial instability are major problems facing rural, developing countries, WiMax has proven to be an adequate means of providing wireless Internet – and looking ahead at the ways in which WiMax will benefit additional countries in the future is a hopeful and exciting prospect.

Though many have been skeptical of WiMax in the United States, 2010 could and should be the year when WiMax takes off and gains major ground at home. Though deployment abroad has been increasing in recent months and years, nationwide WiMax in the United States has been very spare. This will all change in 2010. The combination of a broadband stimulus plan, an accelerated rollout by Clearwire to reach 120 million people in the New Year, and a bigger WiMax push by Clearwire wholesale partners Sprint Nextel, Comcast, and Time Warner Cable appear to be many of the key ingredients necessary for expansion of WiMax in the U.S. Because WiMax technology represents 25% of the last mile broadband stimulus applications, the eventual release of broadband stimulus funds should be yet another boost to WiMax venders in 2010.

A major complaint regarding WiMax’s mainstream appeal has been a lack of mobile devices. Clearwire CEO Bill Morrow recently made comments regarding a WiMax handset to come late in 2010, and a variety of new WiMax-enabled devices will rollout in 2010 to further spur on WiMax growth and usability, as seen at the Consumer Electronics Show (CES) in Las Vegas this past weekend. Sprint recently unveiled a new WiMax phone from HTC, the A9292, making it the second WiMax phone from HTC that will work on Google’s Android operating system. Other items on the inventory list include Sprint’s LG LS680 Android operated handset, LG’s LN510, a device combining a touch screen and a Qwerty keyboard marketed towards the texting/messaging consumers, and the LN240, a cheaper texting phone offered by LG. Sprint is also bringing to the market the Blackberry Tour 2 9650, a device combining both Wi-Fi and the Blackberry 5.0 operating system. Motorola will be introducing a full touch screen Android 1.6 phone with a 5MP camera onboard and a black version of the Clutch. The introduction of so many new WiMax-enabled devices to the market gives insight into the increasing popularity of WiMax in the upcoming year and the new ways in which it will effect the technology world at large.

At the start of the New Year, we are also hearing more and more about the successful test launch of Long Term Evolution (LTE). Some experts are skeptical of the new system while others are confident that LTE will surpass WiMax deployment in years ahead. Verizon has committed to rolling out LTE, delivering ten times the data of current 3G technologies. Other companies including NTT DoCoMo in Japan, Telecom in France, Vodafone in the U.K., AT&T, and T-Mobile have also announced that they plan to adopt LTE rather than WiMax. Concurrently, Sprint, Clearwire, Comcast, UQ Communications, and Yota are all aggressively rolling out 4G networks using WiMax technology. This being said, are LTE and WiMax on a collision course? And if so, who will prevail? Both WiMax and LTE use the same building blocks and are far more similar than they are different. Godfrey Chua, research manager in the wireless and mobile infrastructure group at IDC pointed out that though the two are similar, there are discrepancies that must be noted -

“LTE was designed with mobility in mind from the get-go, while 802.16 (WiMax) evolved from standards based on fixed wireless networking…We characterize WiMax and LTE as two circles that overlap. Inevitably there will be some competition, but competition is not the overriding market scenario. It’s not what defines those two markets.”

The picture is still unclear and because LTE is only in its early stages, it may take until 2011 until we even begin to see real indicators as to where the wireless world is going in light of these two competing technologies. Whatever the case may be in future years, 2010 will be the year of WiMax.